KS
Kansas House Bill HB2172

Kansas 2023-2024 Regular Session

Kansas House Bill HB2172 Compare Versions

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1+Session of 2023
12 HOUSE BILL No. 2172
2-AN ACT concerning trusts; enacting the uniform trust decanting act; relating to the power
3-of an authorized fiduciary to distribute property of a first trust to one or more second
4-trusts or to modify the terms of the first trust; authorizing modification of a
5-noncharitable irrevocable trust to provide that the rule against perpetuities is
6-inapplicable; providing that the Kansas uniform statutory rule against perpetuities is
7-inapplicable to trusts under certain circumstances; modifying the definition of
8-resident trust in the Kansas income tax act; amending K.S.A. 59-3404 and K.S.A.
9-2022 Supp. 58a-411 and 79-32,109 and repealing the existing sections.
3+By Committee on Judiciary
4+1-25
5+AN ACT concerning trusts; enacting the uniform trust decanting act;
6+relating to the power of an authorized fiduciary to distribute property of
7+a first trust to one or more second trusts or to modify the terms of the
8+first trust.
109 Be it enacted by the Legislature of the State of Kansas:
11-New Section 1. Sections 1 through 30, and amendments thereto,
12-shall be known and may be cited as the uniform trust decanting act.
13-New Sec. 2. As used in the uniform trust decanting act:
10+Section 1. Sections 1 through 30, and amendments thereto, shall be
11+known and may be cited as the uniform trust decanting act.
12+Sec. 2. As used in the uniform trust decanting act:
1413 (a) "Appointive property" means the property or property interest
1514 subject to a power of appointment.
1615 (b) "Ascertainable standard" means a standard relating to an
17-individual's health, education, support or maintenance within the
18-meaning of 26 U.S.C. § 2041(b)(1)(A) or 26 U.S.C. § 2514(c)(1) and
19-any applicable regulations.
16+individual's health, education, support or maintenance within the meaning
17+of 26 U.S.C. § 2041(b)(1)(A) or 26 U.S.C. § 2514(c)(1) and any applicable
18+regulations.
2019 (c) "Authorized fiduciary" means a:
21-(1) Trustee or other fiduciary, other than a settlor, that has
22-discretion to distribute or direct a trustee to distribute part or all of the
23-principal of the first trust to one or more current beneficiaries;
20+(1) Trustee or other fiduciary, other than a settlor, that has discretion
21+to distribute or direct a trustee to distribute part or all of the principal of
22+the first trust to one or more current beneficiaries;
2423 (2) special fiduciary appointed under section 9, and amendments
2524 thereto; or
26-(3) special-needs fiduciary under section 13, and amendments
27-thereto.
25+(3) special-needs fiduciary under section 13, and amendments thereto.
2826 (d) "Beneficiary" means a person that:
29-(1) Has a present or future, vested or contingent, beneficial
30-interest in a trust;
27+(1) Has a present or future, vested or contingent, beneficial interest in
28+a trust;
3129 (2) holds a power of appointment over trust property; or
3230 (3) is an identified charitable organization that will or may receive
3331 distributions under the terms of the trust.
3432 (e) "Charitable interest" means an interest in a trust that:
3533 (1) Is held by an identified charitable organization and makes the
3634 organization a qualified beneficiary;
3735 (2) benefits only charitable organizations and, if the interest were
38-held by an identified charitable organization, would make the
39-organization a qualified beneficiary; or
40-(3) is held solely for charitable purposes and, if the interest were
41-held by an identified charitable organization, would make the
42-organization a qualified beneficiary.
36+held by an identified charitable organization, would make the organization
37+a qualified beneficiary; or
38+(3) is held solely for charitable purposes and, if the interest were held
39+by an identified charitable organization, would make the organization a
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76+qualified beneficiary.
4377 (f) "Charitable organization" means a:
4478 (1) Person, other than an individual, organized and operated
4579 exclusively for charitable purposes; or
4680 (2) government or governmental subdivision, agency or
4781 instrumentality, to the extent it holds funds exclusively for a charitable
4882 purpose.
49-(g) "Charitable purpose" means the relief of poverty, the
50-advancement of education or religion, the promotion of health, a
51-municipal or other governmental purpose or another purpose the
52-achievement of which is beneficial to the community.
83+(g) "Charitable purpose" means the relief of poverty, the advancement
84+of education or religion, the promotion of health, a municipal or other
85+governmental purpose or another purpose the achievement of which is
86+beneficial to the community.
5387 (h) "Court" means the district court.
5488 (i) "Current beneficiary" means a beneficiary that, on the date the
5589 beneficiary's qualification is determined, is a distributee or permissible
56-distributee of trust income or principal. The term includes the holder of
57-a presently exercisable general power of appointment but does not
58-include a person that is a beneficiary only because the person holds any
59-other power of appointment.
60-(j) "Decanting power" or "the decanting power" means the power
61-of an authorized fiduciary under the uniform trust decanting act to
62-distribute property of a first trust to one or more second trusts or to
63-modify the terms of the first trust.
64-(k) "Expanded distributive discretion" means a discretionary
65-power of distribution that is not limited to an ascertainable standard or HOUSE BILL No. 2172—page 2
66-a reasonably definite standard.
67-(l) "First trust" means a trust over which an authorized fiduciary
68-may exercise the decanting power.
90+distributee of trust income or principal. The term includes the holder of a
91+presently exercisable general power of appointment but does not include a
92+person that is a beneficiary only because the person holds any other power
93+of appointment.
94+(j) "Decanting power" or "the decanting power" means the power of
95+an authorized fiduciary under the uniform trust decanting act to distribute
96+property of a first trust to one or more second trusts or to modify the terms
97+of the first trust.
98+(k) "Expanded distributive discretion" means a discretionary power of
99+distribution that is not limited to an ascertainable standard or a reasonably
100+definite standard.
101+(l) "First trust" means a trust over which an authorized fiduciary may
102+exercise the decanting power.
69103 (m) "First-trust instrument" means the trust instrument for a first
70104 trust.
71-(n) "General power of appointment" means a power of
72-appointment exercisable in favor of a powerholder, the powerholder's
73-estate, a creditor of the powerholder or a creditor of the powerholder's
74-estate.
75-(o) "Jurisdiction," with respect to a geographic area, includes a
76-state or country.
77-(p) "Person" means an individual, estate, business or nonprofit
78-entity, public corporation, government or governmental subdivision,
79-agency or instrumentality or other legal entity.
105+(n) "General power of appointment" means a power of appointment
106+exercisable in favor of a powerholder, the powerholder's estate, a creditor
107+of the powerholder or a creditor of the powerholder's estate.
108+(o) "Jurisdiction," with respect to a geographic area, includes a state
109+or country.
110+(p) "Person" means an individual, estate, business or nonprofit entity,
111+public corporation, government or governmental subdivision, agency or
112+instrumentality or other legal entity.
80113 (q) "Power of appointment" means a power that enables a
81-powerholder acting in a nonfiduciary capacity to designate a recipient
82-of an ownership interest in or another power of appointment over the
114+powerholder acting in a nonfiduciary capacity to designate a recipient of
115+an ownership interest in or another power of appointment over the
83116 appointive property. The term does not include a power of attorney.
84-(r) "Powerholder" means a person in which a donor creates a
85-power of appointment.
86-(s) "Presently exercisable power of appointment" means a power
87-of appointment exercisable by the powerholder at the relevant time.
88-The term:
117+(r) "Powerholder" means a person in which a donor creates a power
118+of appointment.
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162+(s) "Presently exercisable power of appointment" means a power of
163+appointment exercisable by the powerholder at the relevant time. The
164+term:
89165 (1) Includes a power of appointment exercisable only after the
90166 occurrence of a specified event, the satisfaction of an ascertainable
91167 standard or the passage of a specified time only after the:
92168 (A) Occurrence of the specified event;
93169 (B) satisfaction of the ascertainable standard; or
94170 (C) passage of the specified time; and
95171 (2) does not include a power exercisable only at the powerholder's
96172 death.
97-(t) "Qualified beneficiary" means a beneficiary that, on the date
98-the beneficiary's qualification is determined:
173+(t) "Qualified beneficiary" means a beneficiary that, on the date the
174+beneficiary's qualification is determined:
99175 (1) Is a distributee or permissible distributee of trust income or
100176 principal;
101-(2) would be a distributee or permissible distributee of trust
102-income or principal if the interests of the distributees described in
103-paragraph (1) terminated on that date without causing the trust to
104-terminate; or
105-(3) would be a distributee or permissible distributee of trust
106-income or principal if the trust terminated on that date.
177+(2) would be a distributee or permissible distributee of trust income
178+or principal if the interests of the distributees described in paragraph (1)
179+terminated on that date without causing the trust to terminate; or
180+(3) would be a distributee or permissible distributee of trust income
181+or principal if the trust terminated on that date.
107182 (u) "Reasonably definite standard" means a clearly measurable
108183 standard under which a holder of a power of distribution is legally
109184 accountable within the meaning of 26 U.S.C. § 674(b)(5)(A) and any
110185 applicable regulations.
111186 (v) "Record" means information that is inscribed on a tangible
112187 medium or that is stored in an electronic or other medium and is
113188 retrievable in perceivable form.
114189 (w) "Second trust" means a:
115-(1) First trust after modification under the uniform trust decanting
116-act; or
117-(2) trust to which a distribution of property from a first trust is or
118-may be made under the uniform trust decanting act.
119-(x) "Second-trust instrument" means the trust instrument for a
120-second trust.
190+(1) First trust after modification under the uniform trust decanting act;
191+or
192+(2) trust to which a distribution of property from a first trust is or may
193+be made under the uniform trust decanting act.
194+(x) "Second-trust instrument" means the trust instrument for a second
195+trust.
121196 (y) "Settlor," except as otherwise provided in section 25, and
122-amendments thereto, means a person, including a testator, that creates
123-or contributes property to a trust. If more than one person creates or
124-contributes property to a trust, each person is a "settlor" of the portion
125-of the trust property attributable to the person's contribution except to
126-the extent another person has power to revoke or withdraw that portion.
197+amendments thereto, means a person, including a testator, that creates or
198+contributes property to a trust. If more than one person creates or
199+contributes property to a trust, each person is a "settlor" of the portion of
200+the trust property attributable to the person's contribution except to the
201+extent another person has power to revoke or withdraw that portion.
127202 (z) "Sign" means, with present intent to authenticate or adopt a
128203 record:
129-(1) To execute or adopt a tangible symbol; or HOUSE BILL No. 2172—page 3
204+(1) To execute or adopt a tangible symbol; or
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130248 (2) to attach to or logically associate with the record an electronic
131249 symbol, sound or process.
132250 (aa) "State" means a state of the United States, the District of
133-Columbia, Puerto Rico, the United States Virgin Islands or any territory
134-or insular possession subject to the jurisdiction of the United States.
251+Columbia, Puerto Rico, the United States Virgin Islands or any territory or
252+insular possession subject to the jurisdiction of the United States.
135253 (bb) "Terms of the trust" means:
136-(1) Except as otherwise provided in paragraph (2), the
137-manifestation of the settlor's intent regarding a trust's provisions as:
254+(1) Except as otherwise provided in paragraph (2), the manifestation
255+of the settlor's intent regarding a trust's provisions as:
138256 (A) Expressed in the trust instrument; or
139257 (B) established by other evidence that would be admissible in a
140258 judicial proceeding;
141-(2) the trust's provisions as established, determined or amended by
142-a:
259+(2) the trust's provisions as established, determined or amended by a:
143260 (A) Trustee or other person in accordance with applicable law;
144261 (B) court order; or
145262 (C) nonjudicial settlement agreement under K.S.A. 58a-111, and
146263 amendments thereto.
147264 (cc) "Trust instrument" means a record executed by the settlor to
148-create a trust or by any person to create a second trust that contains
149-some or all of the terms of the trust, including any amendments.
150-New Sec. 3. (a) Except as otherwise provided in subsections (b)
151-and (c), the uniform trust decanting act applies to an express trust that
152-is irrevocable or revocable by the settlor only with the consent of the
153-trustee or a person holding an adverse interest.
265+create a trust or by any person to create a second trust that contains some
266+or all of the terms of the trust, including any amendments.
267+Sec. 3. (a) Except as otherwise provided in subsections (b) and (c),
268+the uniform trust decanting act applies to an express trust that is
269+irrevocable or revocable by the settlor only with the consent of the trustee
270+or a person holding an adverse interest.
154271 (b) The uniform trust decanting act does not apply to a trust held
155272 solely for charitable purposes.
156-(c) Subject to section 15, and amendments thereto, a trust
157-instrument may restrict or prohibit exercise of the decanting power.
273+(c) Subject to section 15, and amendments thereto, a trust instrument
274+may restrict or prohibit exercise of the decanting power.
158275 (d) The uniform trust decanting act does not limit the power of a
159276 trustee, powerholder or other person to distribute or appoint property in
160-further trust or to modify a trust under the trust instrument, law of this
161-state other than the act, common law, a court order or a nonjudicial
162-settlement agreement.
277+further trust or to modify a trust under the trust instrument, law of this state
278+other than the act, common law, a court order or a nonjudicial settlement
279+agreement.
163280 (e) The uniform trust decanting act does not affect the ability of a
164281 settlor to provide in a trust instrument for the distribution of the trust
165282 property or appointment in further trust of the trust property or for
166283 modification of the trust instrument.
167-New Sec. 4. (a) In exercising the decanting power, an authorized
168-fiduciary shall act in accordance with its fiduciary duties, including the
169-duty to act in accordance with the purposes of the first trust.
170-(b) The uniform trust decanting act does not create or imply a duty
171-to exercise the decanting power or to inform beneficiaries about the
284+Sec. 4. (a) In exercising the decanting power, an authorized fiduciary
285+shall act in accordance with its fiduciary duties, including the duty to act in
286+accordance with the purposes of the first trust.
287+(b) The uniform trust decanting act does not create or imply a duty to
288+exercise the decanting power or to inform beneficiaries about the
172289 applicability of the act.
173290 (c) Except as otherwise provided in a first-trust instrument, for
174-purposes of the uniform trust decanting act and K.S.A. 58a-801 and
175-58a-802(a), and amendments thereto, the terms of the first trust are
176-deemed to include the decanting power.
177-New Sec. 5. The uniform trust decanting act applies to a trust
178-created before, on, or after July 1, 2023, that:
179-(a) Has its principal place of administration in this state, including
180-a trust whose principal place of administration has been changed to this
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334+purposes of the uniform trust decanting act and K.S.A. 58a-801 and 58a-
335+802(a), and amendments thereto, the terms of the first trust are deemed to
336+include the decanting power.
337+Sec. 5. The uniform trust decanting act applies to a trust created
338+before, on, or after July 1, 2023, that:
339+(a) Has its principal place of administration in this state, including a
340+trust whose principal place of administration has been changed to this
181341 state; or
182-(b) provides by its trust instrument that it is governed by the law
183-of this state or is governed by the law of this state for the purpose of:
342+(b) provides by its trust instrument that it is governed by the law of
343+this state or is governed by the law of this state for the purpose of:
184344 (1) Administration, including administration of a trust whose
185-governing law for purposes of administration has been changed to the
186-law of this state;
345+governing law for purposes of administration has been changed to the law
346+of this state;
187347 (2) construction of terms of the trust; or
188348 (3) determining the meaning or effect of terms of the trust.
189-New Sec. 6. A trustee or other person that reasonably relies on the
190-validity of a distribution of part or all of the property of a trust to
191-another trust, or a modification of a trust, under the uniform trust
192-decanting act, law of this state other than the act or the law of another
193-jurisdiction is not liable to any person for any action or failure to act as HOUSE BILL No. 2172—page 4
194-a result of the reliance.
195-New Sec. 7. (a) In this section, a notice period begins on the day
196-notice is given under subsection (c) and ends 59 days after the day
197-notice is given.
198-(b) Except as otherwise provided in the uniform trust decanting
199-act, an authorized fiduciary may exercise the decanting power without
200-the consent of any person and without court approval.
349+Sec. 6. A trustee or other person that reasonably relies on the validity
350+of a distribution of part or all of the property of a trust to another trust, or a
351+modification of a trust, under the uniform trust decanting act, law of this
352+state other than the act or the law of another jurisdiction is not liable to any
353+person for any action or failure to act as a result of the reliance.
354+Sec. 7. (a) In this section, a notice period begins on the day notice is
355+given under subsection (c) and ends 59 days after the day notice is given.
356+(b) Except as otherwise provided in the uniform trust decanting act,
357+an authorized fiduciary may exercise the decanting power without the
358+consent of any person and without court approval.
201359 (c) Except as otherwise provided in subsection (f), an authorized
202360 fiduciary shall give notice in a record of the intended exercise of the
203361 decanting power not later than 60 days before the exercise to:
204362 (1) Each settlor of the first trust, if living or then in existence;
205363 (2) each qualified beneficiary of the first trust;
206-(3) each holder of a presently exercisable power of appointment
207-over any part or all of the first trust;
208-(4) each person that currently has the right to remove or replace
209-the authorized fiduciary;
364+(3) each holder of a presently exercisable power of appointment over
365+any part or all of the first trust;
366+(4) each person that currently has the right to remove or replace the
367+authorized fiduciary;
210368 (5) each other fiduciary of the first trust;
211369 (6) each fiduciary of the second trust;
212-(7) each person acting as an advisor or protector of the first trust;
213-and
370+(7) each person acting as an advisor or protector of the first trust; and
214371 (8) the attorney general, if section 14(b), and amendments thereto,
215372 applies.
216373 (d) An authorized fiduciary is not required to give notice under
217-subsection (c) to a person that is not known to the fiduciary or is known
218-to the fiduciary but cannot be located by the fiduciary after reasonable
374+subsection (c) to a person that is not known to the fiduciary or is known to
375+the fiduciary but cannot be located by the fiduciary after reasonable
219376 diligence.
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220420 (e) A notice under subsection (c) shall:
221-(1) Specify the manner in which the authorized fiduciary intends
222-to exercise the decanting power, which shall include a statement as to
223-the authorized fiduciary's reason for the proposed decanting and an
224-explanation as to the differences between the first trust and the second
225-trust or trusts;
421+(1) Specify the manner in which the authorized fiduciary intends to
422+exercise the decanting power, which shall include a statement as to the
423+authorized fiduciary's reason for the proposed decanting and an
424+explanation as to the differences between the first trust and the second trust
425+or trusts;
226426 (2) specify the proposed effective date for exercise of the power;
227427 (3) include a copy of the first-trust instrument;
228428 (4) include a copy of all second-trust instruments;
229-(5) include a statement indicating the capacity in which the
230-intended recipient is being given notice; and
429+(5) include a statement indicating the capacity in which the intended
430+recipient is being given notice; and
231431 (6) include a statement that any application under section 9, and
232-amendments thereto, shall be filed within six months from the day
233-notice is given.
432+amendments thereto, shall be filed within six months from the day notice
433+is given.
234434 (f) The decanting power may be exercised before expiration of the
235-notice period under subsection (a) if all persons entitled to receive
236-notice waive the period in a signed record.
237-(g) The receipt of notice, waiver of the notice period or expiration
238-of the notice period does not affect the right of a person to file an
239-application under section 9, and amendments thereto, except as
240-provided in that section.
241-(h) An exercise of the decanting power is not ineffective because
242-of the failure to give notice to one or more persons under subsection (c)
243-if the authorized fiduciary acted with reasonable care to comply with
244-subsection (c).
245-New Sec. 8. (a) Notice to a person with authority to represent and
246-bind another person under a first-trust instrument or the Kansas
247-uniform trust code, K.S.A. 58a-101 et seq., and amendments thereto,
248-has the same effect as notice given directly to the person represented.
249-(b) Consent of or waiver by a person with authority to represent
250-and bind another person under a first-trust instrument or the Kansas
251-uniform trust code, K.S.A. 58a-101 et seq., and amendments thereto, is
252-binding on the person represented unless the person represented objects
253-to the representation before the consent or waiver otherwise would
254-become effective.
435+notice period under subsection (a) if all persons entitled to receive notice
436+waive the period in a signed record.
437+(g) The receipt of notice, waiver of the notice period or expiration of
438+the notice period does not affect the right of a person to file an application
439+under section 9, and amendments thereto, except as provided in that
440+section.
441+(h) An exercise of the decanting power is not ineffective because of
442+the failure to give notice to one or more persons under subsection (c) if the
443+authorized fiduciary acted with reasonable care to comply with subsection
444+(c).
445+Sec. 8. (a) Notice to a person with authority to represent and bind
446+another person under a first-trust instrument or the Kansas uniform trust
447+code, K.S.A. 58a-101 et seq., and amendments thereto, has the same effect
448+as notice given directly to the person represented.
449+(b) Consent of or waiver by a person with authority to represent and
450+bind another person under a first-trust instrument or the Kansas uniform
451+trust code, K.S.A. 58a-101 et seq., and amendments thereto, is binding on
452+the person represented unless the person represented objects to the
453+representation before the consent or waiver otherwise would become
454+effective.
255455 (c) A person with authority to represent and bind another person
256-under a first-trust instrument or the Kansas uniform trust code, K.S.A.
257-58a-101 et seq., and amendments thereto, may file an application under HOUSE BILL No. 2172—page 5
258-section 9, and amendments thereto, on behalf of the person represented.
456+under a first-trust instrument or the Kansas uniform trust code, K.S.A. 58a-
457+101 et seq., and amendments thereto, may file an application under section
458+9, and amendments thereto, on behalf of the person represented.
259459 (d) A settlor shall not represent or bind a beneficiary under the
260460 uniform trust decanting act.
261-New Sec. 9. (a) On application of an authorized fiduciary, a
262-person entitled to notice under section 7(c), and amendments thereto, a
263-beneficiary, or with respect to a charitable interest, the attorney general
264-or other person that has standing to enforce the charitable interest, the
265-court may:
266-(1) Provide instructions to the authorized fiduciary regarding
267-whether a proposed exercise of the decanting power is permitted under
268-the uniform trust decanting act and consistent with the fiduciary duties
269-of the authorized fiduciary;
270-(2) appoint a special fiduciary and authorize the special fiduciary
271-to determine whether the decanting power should be exercised under
272-the uniform trust decanting act and to exercise the decanting power;
461+Sec. 9. (a) On application of an authorized fiduciary, a person entitled
462+to notice under section 7(c), and amendments thereto, a beneficiary, or
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506+with respect to a charitable interest, the attorney general or other person
507+that has standing to enforce the charitable interest, the court may:
508+(1) Provide instructions to the authorized fiduciary regarding whether
509+a proposed exercise of the decanting power is permitted under the uniform
510+trust decanting act and consistent with the fiduciary duties of the
511+authorized fiduciary;
512+(2) appoint a special fiduciary and authorize the special fiduciary to
513+determine whether the decanting power should be exercised under the
514+uniform trust decanting act and to exercise the decanting power;
273515 (3) approve an exercise of the decanting power;
274-(4) subject to the limitation set forth in subsection (c), determine
275-that a proposed or attempted exercise of the decanting power is
276-ineffective because:
277-(A) After applying section 22, and amendments thereto, the
278-proposed or attempted exercise does not or did not comply with the
279-uniform trust decanting act; or
280-(B) the proposed or attempted exercise would be or was an abuse
281-of the fiduciary's discretion or a breach of fiduciary duty;
516+(4) subject to the limitation set forth in subsection (c), determine that
517+a proposed or attempted exercise of the decanting power is ineffective
518+because:
519+(A) After applying section 22, and amendments thereto, the proposed
520+or attempted exercise does not or did not comply with the uniform trust
521+decanting act; or
522+(B) the proposed or attempted exercise would be or was an abuse of
523+the fiduciary's discretion or a breach of fiduciary duty;
282524 (5) determine the extent to which section 22, and amendments
283525 thereto, applies to a prior exercise of the decanting power;
284526 (6) provide instructions to the trustee regarding the application of
285527 section 22, and amendments thereto, to a prior exercise of the decanting
286528 power; or
287529 (7) order other relief to carry out the purposes of the uniform trust
288530 decanting act.
289-(b) On application of an authorized fiduciary, the court may
290-approve:
291-(1) An increase in the fiduciary's compensation under section 16,
292-and amendments thereto; or
531+(b) On application of an authorized fiduciary, the court may approve:
532+(1) An increase in the fiduciary's compensation under section 16, and
533+amendments thereto; or
293534 (2) a modification under section 18, and amendments thereto, of a
294535 provision granting a person the right to remove or replace the fiduciary.
295-(c) A proceeding under subsection (a)(4) shall not be commenced
296-by a person entitled to notice under section 7(c), and amendments
297-thereto, or by a beneficiary unless such proceeding is commenced
298-within six months from the day notice is given under section 7(a), and
299-amendments thereto. Failure to receive notice shall not extend the time
300-by which such proceeding must be commenced if the authorized
301-fiduciary acted with reasonable diligence to comply with the
302-requirements of section 7(c), and amendments thereto.
536+(c) A proceeding under subsection (a)(4) shall not be commenced by
537+a person entitled to notice under section 7(c), and amendments thereto, or
538+by a beneficiary unless such proceeding is commenced within six months
539+from the day notice is given under section 7(a), and amendments thereto.
540+Failure to receive notice shall not extend the time by which such
541+proceeding must be commenced if the authorized fiduciary acted with
542+reasonable diligence to comply with the requirements of section 7(c), and
543+amendments thereto.
303544 (d) In a judicial proceeding involving the decanting of a trust, the
304545 court, as justice and equity may require, may award costs and expenses,
305546 including reasonable attorney fees, to any party, to be paid by another
306547 party or from the trust that is the subject of the controversy.
307-New Sec. 10. An exercise of the decanting power shall be made in
308-a record signed by an authorized fiduciary. The signed record shall,
309-directly or by reference to the notice required by section 7, and
310-amendments thereto, identify the first trust and the second trust or trusts
311-and state the property of the first trust being distributed to each second
312-trust and the property, if any, that remains in the first trust.
313-New Sec. 11. (a) As used in this section:
548+Sec. 10. An exercise of the decanting power shall be made in a record
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592+signed by an authorized fiduciary. The signed record shall, directly or by
593+reference to the notice required by section 7, and amendments thereto,
594+identify the first trust and the second trust or trusts and state the property
595+of the first trust being distributed to each second trust and the property, if
596+any, that remains in the first trust.
597+Sec. 11. (a) As used in this section:
314598 (1) "Noncontingent right" means a right that is not subject to the
315599 exercise of discretion or the occurrence of a specified event that is not
316-certain to occur. The term does not include a right held by a beneficiary
317-if any person has discretion to distribute property subject to the right to
318-any person other than the beneficiary or the beneficiary's estate.
600+certain to occur. The term does not include a right held by a beneficiary if
601+any person has discretion to distribute property subject to the right to any
602+person other than the beneficiary or the beneficiary's estate.
319603 (2) "Presumptive remainder beneficiary" means a qualified
320604 beneficiary other than a current beneficiary.
321-(3) "Successor beneficiary" means a beneficiary that is not a HOUSE BILL No. 2172—page 6
322-qualified beneficiary on the date the beneficiary's qualification is
323-determined. "Successor beneficiary" does not include a person that is a
324-beneficiary only because the person holds a nongeneral power of
325-appointment.
605+(3) "Successor beneficiary" means a beneficiary that is not a qualified
606+beneficiary on the date the beneficiary's qualification is determined.
607+"Successor beneficiary" does not include a person that is a beneficiary
608+only because the person holds a nongeneral power of appointment.
326609 (4) "Vested interest" means a:
327-(A) Right to a mandatory distribution that is a noncontingent right
328-as of the date of the exercise of the decanting power;
329-(B) current and noncontingent right, annually or more frequently,
330-to a mandatory distribution of income, a specified dollar amount, or a
610+(A) Right to a mandatory distribution that is a noncontingent right as
611+of the date of the exercise of the decanting power;
612+(B) current and noncontingent right, annually or more frequently, to a
613+mandatory distribution of income, a specified dollar amount, or a
331614 percentage of value of some or all of the trust property;
332-(C) current and noncontingent right, annually or more frequently,
333-to withdraw income, a specified dollar amount, or a percentage of value
334-of some or all of the trust property;
615+(C) current and noncontingent right, annually or more frequently, to
616+withdraw income, a specified dollar amount, or a percentage of value of
617+some or all of the trust property;
335618 (D) presently exercisable general power of appointment; or
336-(E) right to receive an ascertainable part of the trust property on
337-the trust's termination that is not subject to the exercise of discretion or
338-to the occurrence of a specified event that is not certain to occur.
339-(b) Subject to subsection (c) and section 14, and amendments
340-thereto, an authorized fiduciary that has expanded distributive
341-discretion over the principal of a first trust for the benefit of one or
342-more current beneficiaries may exercise the decanting power over the
343-principal of the first trust.
344-(c) Subject to section 13, and amendments thereto, in an exercise
345-of the decanting power under this section, a second trust shall not:
619+(E) right to receive an ascertainable part of the trust property on the
620+trust's termination that is not subject to the exercise of discretion or to the
621+occurrence of a specified event that is not certain to occur.
622+(b) Subject to subsection (c) and section 14, and amendments thereto,
623+an authorized fiduciary that has expanded distributive discretion over the
624+principal of a first trust for the benefit of one or more current beneficiaries
625+may exercise the decanting power over the principal of the first trust.
626+(c) Subject to section 13, and amendments thereto, in an exercise of
627+the decanting power under this section, a second trust shall not:
346628 (1) Include as a current beneficiary a person that is not a current
347629 beneficiary of the first trust, except as otherwise provided in subsection
348630 (d);
349631 (2) include as a presumptive remainder beneficiary or successor
350632 beneficiary a person that is not a current beneficiary, presumptive
351-remainder beneficiary or successor beneficiary of the first trust, except
352-as otherwise provided in subsection (d); or
633+remainder beneficiary or successor beneficiary of the first trust, except as
634+otherwise provided in subsection (d); or
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353678 (3) reduce or eliminate a vested interest.
354679 (d) Subject to subsection (c)(3) and section 14, and amendments
355-thereto, in an exercise of the decanting power under this section, a
356-second trust may be a trust created or administered under the law of any
680+thereto, in an exercise of the decanting power under this section, a second
681+trust may be a trust created or administered under the law of any
357682 jurisdiction and may:
358683 (1) Retain a power of appointment granted in the first trust;
359-(2) omit a power of appointment granted in the first trust, other
360-than a presently exercisable general power of appointment;
361-(3) create or modify a power of appointment if the powerholder is
362-a current beneficiary of the first trust and the authorized fiduciary has
363-expanded distributive discretion to distribute principal to the
364-beneficiary; and
365-(4) create or modify a power of appointment if the powerholder is
366-a presumptive remainder beneficiary or successor beneficiary of the
367-first trust, but the exercise of the power may take effect only after the
684+(2) omit a power of appointment granted in the first trust, other than a
685+presently exercisable general power of appointment;
686+(3) create or modify a power of appointment if the powerholder is a
687+current beneficiary of the first trust and the authorized fiduciary has
688+expanded distributive discretion to distribute principal to the beneficiary;
689+and
690+(4) create or modify a power of appointment if the powerholder is a
691+presumptive remainder beneficiary or successor beneficiary of the first
692+trust, but the exercise of the power may take effect only after the
368693 powerholder becomes, or would have become if then living, a current
369694 beneficiary.
370695 (e) A power of appointment described in subsection (d) may be
371696 general or nongeneral. The class of permissible appointees in favor of
372-which the power may be exercised may be broader than or different
373-from the beneficiaries of the first trust.
697+which the power may be exercised may be broader than or different from
698+the beneficiaries of the first trust.
374699 (f) If an authorized fiduciary has expanded distributive discretion
375700 over part but not all of the principal of a first trust, the fiduciary may
376701 exercise the decanting power under this section over that part of the
377702 principal over which the authorized fiduciary has expanded distributive
378703 discretion.
379-New Sec. 12. (a) As used in this section, "limited distributive
380-discretion" means a discretionary power of distribution that is limited to
381-an ascertainable standard or a reasonably definite standard.
704+Sec. 12. (a) As used in this section, "limited distributive discretion"
705+means a discretionary power of distribution that is limited to an
706+ascertainable standard or a reasonably definite standard.
382707 (b) An authorized fiduciary that has limited distributive discretion
383708 over the principal of the first trust for benefit of one or more current
384-beneficiaries may exercise the decanting power over the principal of
385-the first trust. HOUSE BILL No. 2172—page 7
709+beneficiaries may exercise the decanting power over the principal of the
710+first trust.
386711 (c) Under this section and subject to section 14, and amendments
387-thereto, a second trust may be created or administered under the law of
388-any jurisdiction. Under this section, the second trusts, in the aggregate,
389-shall grant each beneficiary of the first trust beneficial interests that are
390-substantially similar to the beneficial interests of the beneficiary in the
391-first trust.
392-(d) A power to make a distribution under a second trust for the
393-benefit of a beneficiary who is an individual is substantially similar to a
394-power under the first trust to make a distribution directly to the
395-beneficiary. A distribution is for the benefit of a beneficiary if the:
712+thereto, a second trust may be created or administered under the law of any
713+jurisdiction. Under this section, the second trusts, in the aggregate, shall
714+grant each beneficiary of the first trust beneficial interests that are
715+substantially similar to the beneficial interests of the beneficiary in the first
716+trust.
717+(d) A power to make a distribution under a second trust for the benefit
718+of a beneficiary who is an individual is substantially similar to a power
719+under the first trust to make a distribution directly to the beneficiary. A
720+distribution is for the benefit of a beneficiary if the:
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396764 (1) Distribution is applied for the benefit of the beneficiary;
397765 (2) beneficiary is under a legal disability or the trustee reasonably
398766 believes the beneficiary is incapacitated, and the distribution is made as
399767 permitted under the Kansas uniform trust code, K.S.A. 58a-101 et seq.,
400768 and amendments thereto; or
401-(3) distribution is made as permitted under the terms of the first-
402-trust instrument and the second-trust instrument for the benefit of the
769+(3) distribution is made as permitted under the terms of the first-trust
770+instrument and the second-trust instrument for the benefit of the
403771 beneficiary.
404-(e) If an authorized fiduciary has limited distributive discretion
405-over part but not all of the principal of a first trust, the fiduciary may
406-exercise the decanting power under this section over that part of the
407-principal over which the authorized fiduciary has limited distributive
408-discretion.
409-New Sec. 13. (a) As used in this section:
410-(1) "Beneficiary with a disability" means a beneficiary of a first
411-trust who the special-needs fiduciary reasonably believes may qualify
412-for governmental benefits based on disability, whether or not the
413-beneficiary currently receives those benefits or is an individual who has
414-been adjudicated as incapacitated.
415-(2) "Governmental benefits" means financial aid or services from
416-a state, federal or other public agency.
417-(3) "Special-needs fiduciary" means, with respect to a trust that
418-has a beneficiary with a disability:
772+(e) If an authorized fiduciary has limited distributive discretion over
773+part but not all of the principal of a first trust, the fiduciary may exercise
774+the decanting power under this section over that part of the principal over
775+which the authorized fiduciary has limited distributive discretion.
776+Sec. 13. (a) As used in this section:
777+(1) "Beneficiary with a disability" means a beneficiary of a first trust
778+who the special-needs fiduciary reasonably believes may qualify for
779+governmental benefits based on disability, whether or not the beneficiary
780+currently receives those benefits or is an individual who has been
781+adjudicated as incapacitated.
782+(2) "Governmental benefits" means financial aid or services from a
783+state, federal or other public agency.
784+(3) "Special-needs fiduciary" means, with respect to a trust that has a
785+beneficiary with a disability:
419786 (A) A trustee or other fiduciary, other than a settlor, that has
420-discretion to distribute part or all of the principal of a first trust to one
421-or more current beneficiaries;
422-(B) if no trustee or fiduciary has discretion under subparagraph
423-(A), a trustee or other fiduciary, other than a settlor, that has discretion
424-to distribute part or all of the income of the first trust to one or more
425-current beneficiaries; or
426-(C) if no trustee or fiduciary has discretion under subparagraphs
427-(A) and (B), a trustee or other fiduciary, other than a settlor, that is
428-required to distribute part or all of the income or principal of the first
429-trust to one or more current beneficiaries.
430-(4) "Special-needs trust" means a trust the trustee believes would
431-not be considered a resource for purposes of determining whether a
787+discretion to distribute part or all of the principal of a first trust to one or
788+more current beneficiaries;
789+(B) if no trustee or fiduciary has discretion under subparagraph (A), a
790+trustee or other fiduciary, other than a settlor, that has discretion to
791+distribute part or all of the income of the first trust to one or more current
792+beneficiaries; or
793+(C) if no trustee or fiduciary has discretion under subparagraphs (A)
794+and (B), a trustee or other fiduciary, other than a settlor, that is required to
795+distribute part or all of the income or principal of the first trust to one or
796+more current beneficiaries.
797+(4) "Special-needs trust" means a trust the trustee believes would not
798+be considered a resource for purposes of determining whether a
432799 beneficiary with a disability is eligible for governmental benefits.
433-(b) A special-needs fiduciary may exercise the decanting power
434-under section 11, and amendments thereto, over the principal of a first
435-trust as if the fiduciary had authority to distribute principal to a
436-beneficiary with a disability subject to expanded distributive discretion
437-if:
438-(1) A second trust is a special-needs trust that benefits the
439-beneficiary with a disability; and
800+(b) A special-needs fiduciary may exercise the decanting power under
801+section 11, and amendments thereto, over the principal of a first trust as if
802+the fiduciary had authority to distribute principal to a beneficiary with a
803+disability subject to expanded distributive discretion if:
804+(1) A second trust is a special-needs trust that benefits the beneficiary
805+with a disability; and
440806 (2) the special-needs fiduciary determines that exercise of the
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441850 decanting power will not be inconsistent with a material purpose of the
442851 first trust.
443852 (c) In an exercise of the decanting power under this section, the
444853 following rules apply:
445854 (1) Notwithstanding section 11(c)(2), and amendments thereto, the
446855 interest in the second trust of a beneficiary with a disability may:
447856 (A) Be a pooled trust as defined by medicaid law for the benefit of
448857 the beneficiary with a disability under 42 U.S.C. § 1396p(d)(4)(C); or
449-(B) contain payback provisions complying with reimbursement HOUSE BILL No. 2172—page 8
858+(B) contain payback provisions complying with reimbursement
450859 requirements of medicaid law under 42 U.S.C. § 1396p(d)(4)(A).
451-(2) Section 11(c)(3), and amendments thereto, does not apply to
452-the interests of the beneficiary with a disability.
860+(2) Section 11(c)(3), and amendments thereto, does not apply to the
861+interests of the beneficiary with a disability.
453862 (3) Except as affected by any change to the interests of the
454-beneficiary with a disability, the second trust, or if there are two or
455-more second trusts, the second trusts in the aggregate, shall grant each
456-other beneficiary of the first trust beneficial interests in the second
457-trusts that are substantially similar to the beneficiary's beneficial
458-interests in the first trust.
459-New Sec. 14. (a) As used in this section:
460-(1) "Determinable charitable interest" means a charitable interest
461-that is a right to a mandatory distribution currently, periodically, on the
462-occurrence of a specified event or after the passage of a specified time
463-and is unconditional or will be held solely for charitable purposes.
863+beneficiary with a disability, the second trust, or if there are two or more
864+second trusts, the second trusts in the aggregate, shall grant each other
865+beneficiary of the first trust beneficial interests in the second trusts that are
866+substantially similar to the beneficiary's beneficial interests in the first
867+trust.
868+Sec. 14. (a) As used in this section:
869+(1) "Determinable charitable interest" means a charitable interest that
870+is a right to a mandatory distribution currently, periodically, on the
871+occurrence of a specified event or after the passage of a specified time and
872+is unconditional or will be held solely for charitable purposes.
464873 (2) "Unconditional" means not subject to the occurrence of a
465874 specified event that is not certain to occur, other than a requirement in a
466875 trust instrument that a charitable organization be in existence or qualify
467-under a particular provision of the United States internal revenue code
468-of 1986 on the date of the distribution, if the charitable organization
469-meets the requirement on the date of determination.
876+under a particular provision of the United States internal revenue code of
877+1986 on the date of the distribution, if the charitable organization meets
878+the requirement on the date of determination.
470879 (b) If a first trust contains a determinable charitable interest, the
471-attorney general has the rights of a qualified beneficiary and may
472-represent and bind the charitable interest.
880+attorney general has the rights of a qualified beneficiary and may represent
881+and bind the charitable interest.
473882 (c) If a first trust contains a charitable interest, the second trust or
474883 trusts shall not:
475884 (1) Diminish the charitable interest;
476-(2) diminish the interest of an identified charitable organization
477-that holds the charitable interest;
478-(3) alter any charitable purpose stated in the first-trust instrument;
479-or
480-(4) alter any condition or restriction related to the charitable
481-interest.
482-(d) If there are two or more second trusts, the second trusts shall
483-be treated as one trust for purposes of determining whether the exercise
484-of the decanting power diminishes the charitable interest or diminishes
485-the interest of an identified charitable organization for purposes of
486-subsection (c).
885+(2) diminish the interest of an identified charitable organization that
886+holds the charitable interest;
887+(3) alter any charitable purpose stated in the first-trust instrument; or
888+(4) alter any condition or restriction related to the charitable interest.
889+(d) If there are two or more second trusts, the second trusts shall be
890+treated as one trust for purposes of determining whether the exercise of the
891+decanting power diminishes the charitable interest or diminishes the
892+interest of an identified charitable organization for purposes of subsection
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936+(c).
487937 (e) If a first trust contains a determinable charitable interest, the
488938 second trust or trusts that include a charitable interest pursuant to
489-subsection (c) shall be administered under the law of this state unless
490-the:
939+subsection (c) shall be administered under the law of this state unless the:
491940 (1) Attorney general, after receiving notice under section 7, and
492941 amendments thereto, fails to object in a signed record delivered to the
493942 authorized fiduciary within the notice period;
494-(2) attorney general consents in a signed record to the second trust
495-or trusts being administered under the law of another jurisdiction; or
943+(2) attorney general consents in a signed record to the second trust or
944+trusts being administered under the law of another jurisdiction; or
496945 (3) court approves the exercise of the decanting power.
497946 (f) The uniform trust decanting act does not limit the powers and
498947 duties of the attorney general under law of this state other than the act.
499-New Sec. 15. (a) An authorized fiduciary shall not exercise the
500-decanting power to the extent the first-trust instrument expressly
501-prohibits exercise of:
948+Sec. 15. (a) An authorized fiduciary shall not exercise the decanting
949+power to the extent the first-trust instrument expressly prohibits exercise
950+of:
502951 (1) The decanting power; or
503-(2) a power granted by state law to the fiduciary to distribute part
504-or all of the principal of the trust to another trust or to modify the trust.
505-(b) Exercise of the decanting power is subject to any restriction in
506-the first-trust instrument that expressly applies to exercise of:
952+(2) a power granted by state law to the fiduciary to distribute part or
953+all of the principal of the trust to another trust or to modify the trust.
954+(b) Exercise of the decanting power is subject to any restriction in the
955+first-trust instrument that expressly applies to exercise of:
507956 (1) The decanting power; or
508-(2) a power granted by state law to a fiduciary to distribute part or
509-all of the principal of the trust to another trust or to modify the trust.
957+(2) a power granted by state law to a fiduciary to distribute part or all
958+of the principal of the trust to another trust or to modify the trust.
510959 (c) A general prohibition of the amendment or revocation of a first
511960 trust, a spendthrift clause or a clause restraining the voluntary or
512-involuntary transfer of a beneficiary's interest does not preclude
513-exercise of the decanting power. HOUSE BILL No. 2172—page 9
961+involuntary transfer of a beneficiary's interest does not preclude exercise
962+of the decanting power.
514963 (d) Subject to subsections (a) and (b), an authorized fiduciary may
515-exercise the decanting power under the uniform trust decanting act
516-even if the first-trust instrument permits the authorized fiduciary or
517-another person to modify the first-trust instrument or to distribute part
518-or all of the principal of the first trust to another trust.
964+exercise the decanting power under the uniform trust decanting act even if
965+the first-trust instrument permits the authorized fiduciary or another person
966+to modify the first-trust instrument or to distribute part or all of the
967+principal of the first trust to another trust.
519968 (e) To the extent the creation of a second-trust instrument is
520969 permitted, if a first-trust instrument contains an express prohibition
521970 described in subsection (a) or an express restriction described in
522971 subsection (b), the provision shall be included in the second-trust
523972 instrument.
524-New Sec. 16. (a) If a first-trust instrument specifies an authorized
973+Sec. 16. (a) If a first-trust instrument specifies an authorized
525974 fiduciary's compensation, the fiduciary shall not exercise the decanting
526975 power to increase the fiduciary's compensation above the specified
527976 compensation unless:
528977 (1) All qualified beneficiaries of the second trust consent to the
529978 increase in a signed record; or
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5301022 (2) the increase is approved by the court.
5311023 (b) If a first-trust instrument does not specify an authorized
5321024 fiduciary's compensation, the fiduciary shall not exercise the decanting
5331025 power to increase the fiduciary's compensation above the compensation
534-permitted by the Kansas uniform trust code, K.S.A. 58a-101 et seq.,
535-and amendments thereto, unless:
1026+permitted by the Kansas uniform trust code, K.S.A. 58a-101 et seq., and
1027+amendments thereto, unless:
5361028 (1) All qualified beneficiaries of the second trust consent to the
5371029 increase in a signed record; or
5381030 (2) the increase is approved by the court.
5391031 (c) A change in an authorized fiduciary's compensation that is
540-incidental to other changes made by the exercise of the decanting
541-power is not an increase in the fiduciary's compensation for purposes of
542-subsections (a) and (b).
543-New Sec. 17. (a) Except as otherwise provided in this section, a
544-second-trust instrument shall not relieve an authorized fiduciary from
545-liability for breach of trust to a greater extent than the first-trust
546-instrument.
547-(b) A second-trust instrument may provide for indemnification of
548-an authorized fiduciary of the first trust or another person acting in a
549-fiduciary capacity under the first trust for any liability or claim that
550-would have been payable from the first trust if the decanting power had
551-not been exercised.
552-(c) A second-trust instrument shall not reduce fiduciary liability in
553-the aggregate.
1032+incidental to other changes made by the exercise of the decanting power is
1033+not an increase in the fiduciary's compensation for purposes of subsections
1034+(a) and (b).
1035+Sec. 17. (a) Except as otherwise provided in this section, a second-
1036+trust instrument shall not relieve an authorized fiduciary from liability for
1037+breach of trust to a greater extent than the first-trust instrument.
1038+(b) A second-trust instrument may provide for indemnification of an
1039+authorized fiduciary of the first trust or another person acting in a fiduciary
1040+capacity under the first trust for any liability or claim that would have been
1041+payable from the first trust if the decanting power had not been exercised.
1042+(c) A second-trust instrument shall not reduce fiduciary liability in the
1043+aggregate.
5541044 (d) Subject to subsection (c), a second-trust instrument may divide
555-and reallocate fiduciary powers among fiduciaries, including one or
556-more trustees, distribution advisors, investment advisors, trust
557-protectors or other persons, and relieve a fiduciary from liability for an
558-act or failure to act of another fiduciary as permitted by law of this state
559-other than the uniform trust decanting act.
560-New Sec. 18. An authorized fiduciary shall not exercise the
561-decanting power to modify a provision in a first-trust instrument
562-granting another person power to remove or replace the fiduciary
563-unless the:
564-(a) Person holding the power consents to the modification in a
565-signed record and the modification applies only to the person;
1045+and reallocate fiduciary powers among fiduciaries, including one or more
1046+trustees, distribution advisors, investment advisors, trust protectors or
1047+other persons, and relieve a fiduciary from liability for an act or failure to
1048+act of another fiduciary as permitted by law of this state other than the
1049+uniform trust decanting act.
1050+Sec. 18. An authorized fiduciary shall not exercise the decanting
1051+power to modify a provision in a first-trust instrument granting another
1052+person power to remove or replace the fiduciary unless the:
1053+(a) Person holding the power consents to the modification in a signed
1054+record and the modification applies only to the person;
5661055 (b) person holding the power and the qualified beneficiaries of the
5671056 second trust consent to the modification in a signed record and the
5681057 modification grants a substantially similar power to another person; or
5691058 (c) court approves the modification and the modification grants a
5701059 substantially similar power to another person.
571-New Sec. 19. (a) As used in this section:
572-(1) "Grantor trust" means a trust as to which a settlor of a first
573-trust is considered the owner under 26 U.S.C. §§ 671 through 677 or 26
574-U.S.C. § 679.
575-(2) "Internal revenue code" means the United States internal
576-revenue code of 1986.
577-(3) "Nongrantor trust" means a trust that is not a grantor trust. HOUSE BILL No. 2172—page 10
1060+Sec. 19. (a) As used in this section:
1061+(1) "Grantor trust" means a trust as to which a settlor of a first trust is
1062+considered the owner under 26 U.S.C. §§ 671 through 677 or 26 U.S.C. §
1063+679.
1064+(2) "Internal revenue code" means the United States internal revenue
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1109+(3) "Nongrantor trust" means a trust that is not a grantor trust.
5781110 (4) "Qualified benefits property" means property subject to the
5791111 minimum distribution requirements of 26 U.S.C. § 401(a)(9), and any
5801112 applicable regulations, or to any similar requirements that refer to 26
5811113 U.S.C. § 401(a)(9) or the regulations.
5821114 (b) An exercise of the decanting power is subject to the following
5831115 limitations:
5841116 (1) If a first trust contains property that qualified, or would have
5851117 qualified but for provisions of the uniform trust decanting act other than
5861118 this section, for a marital deduction for purposes of the gift or estate tax
587-under the internal revenue code or a state gift, estate or inheritance tax,
588-the second-trust instrument shall not include or omit any term that, if
589-included in or omitted from the trust instrument for the trust to which
590-the property was transferred, would have prevented the transfer from
591-qualifying for the deduction, or would have reduced the amount of the
592-deduction, under the same provisions of the internal revenue code or
593-state law under which the transfer qualified.
1119+under the internal revenue code or a state gift, estate or inheritance tax, the
1120+second-trust instrument shall not include or omit any term that, if included
1121+in or omitted from the trust instrument for the trust to which the property
1122+was transferred, would have prevented the transfer from qualifying for the
1123+deduction, or would have reduced the amount of the deduction, under the
1124+same provisions of the internal revenue code or state law under which the
1125+transfer qualified.
5941126 (2) If the first trust contains property that qualified, or would have
5951127 qualified but for provisions of the uniform trust decanting act other than
596-this section, for a charitable deduction for purposes of the income, gift
597-or estate tax under the internal revenue code or a state income, gift,
598-estate or inheritance tax, the second-trust instrument shall not include
599-or omit any term that, if included in or omitted from the trust
600-instrument for the trust to which the property was transferred, would
601-have prevented the transfer from qualifying for the deduction, or would
602-have reduced the amount of the deduction, under the same provisions
603-of the internal revenue code or state law under which the transfer
604-qualified.
1128+this section, for a charitable deduction for purposes of the income, gift or
1129+estate tax under the internal revenue code or a state income, gift, estate or
1130+inheritance tax, the second-trust instrument shall not include or omit any
1131+term that, if included in or omitted from the trust instrument for the trust to
1132+which the property was transferred, would have prevented the transfer
1133+from qualifying for the deduction, or would have reduced the amount of
1134+the deduction, under the same provisions of the internal revenue code or
1135+state law under which the transfer qualified.
6051136 (3) If the first trust contains property that qualified, or would have
6061137 qualified but for provisions of the uniform trust decanting act other than
6071138 this section, for the exclusion from the gift tax described in 26 U.S.C. §
608-2503(b), the second-trust instrument shall not include or omit a term
609-that, if included in or omitted from the trust instrument for the trust to
610-which the property was transferred, would have prevented the transfer
611-from qualifying under 26 U.S.C. § 2503(b). If the first trust contains
612-property that qualified, or would have qualified but for provisions of
613-the uniform trust decanting act other than this section, for the exclusion
614-from the gift tax described in 26 U.S.C. § 2503(b) by application of 26
615-U.S.C. § 2503(c), the second-trust instrument shall not include or omit
616-a term that, if included or omitted from the trust instrument for the trust
617-to which the property was transferred, would have prevented the
618-transfer from qualifying under 26 U.S.C. § 2503(c).
1139+2503(b), the second-trust instrument shall not include or omit a term that,
1140+if included in or omitted from the trust instrument for the trust to which the
1141+property was transferred, would have prevented the transfer from
1142+qualifying under 26 U.S.C. § 2503(b). If the first trust contains property
1143+that qualified, or would have qualified but for provisions of the uniform
1144+trust decanting act other than this section, for the exclusion from the gift
1145+tax described in 26 U.S.C. § 2503(b) by application of 26 U.S.C. §
1146+2503(c), the second-trust instrument shall not include or omit a term that,
1147+if included or omitted from the trust instrument for the trust to which the
1148+property was transferred, would have prevented the transfer from
1149+qualifying under 26 U.S.C. § 2503(c).
6191150 (4) If the property of the first trust includes shares of stock in an S
620-corporation as defined in 26 U.S.C. § 1361 and the first trust is, or but
621-for provisions of the uniform trust decanting act other than this section
622-would be, a permitted shareholder under any provision of 26 U.S.C. §
623-1361, an authorized fiduciary may exercise the power with respect to
624-part or all of the S-corporation stock only if any second trust receiving
625-the stock is a permitted shareholder under 26 U.S.C. § 1361(c)(2). If
626-the property of the first trust includes shares of stock in an S
627-corporation and the first trust is, or but for provisions of the uniform
628-trust decanting act other than this section would be, a qualified
629-subchapter-S trust within the meaning of 26 U.S.C. § 1361(d), the
630-second-trust instrument shall not include or omit a term that prevents
631-the second trust from qualifying as a qualified subchapter-S trust.
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1194+corporation as defined in 26 U.S.C. § 1361 and the first trust is, or but for
1195+provisions of the uniform trust decanting act other than this section would
1196+be, a permitted shareholder under any provision of 26 U.S.C. § 1361, an
1197+authorized fiduciary may exercise the power with respect to part or all of
1198+the S-corporation stock only if any second trust receiving the stock is a
1199+permitted shareholder under 26 U.S.C. § 1361(c)(2). If the property of the
1200+first trust includes shares of stock in an S corporation and the first trust is,
1201+or but for provisions of the uniform trust decanting act other than this
1202+section would be, a qualified subchapter-S trust within the meaning of 26
1203+U.S.C. § 1361(d), the second-trust instrument shall not include or omit a
1204+term that prevents the second trust from qualifying as a qualified
1205+subchapter-S trust.
6321206 (5) If the first trust contains property that qualified, or would have
6331207 qualified but for provisions of the uniform trust decanting act other than
6341208 this section, for a zero inclusion ratio for purposes of the generation-
6351209 skipping transfer tax under 26 U.S.C. § 2642(c), the second-trust
636-instrument shall not include or omit a term that, if included in or
637-omitted from the first-trust instrument, would have prevented the
638-transfer to the first trust from qualifying for a zero inclusion ratio under
639-26 U.S.C. § 2642(c).
640-(6) If the first trust is directly or indirectly the beneficiary of
641-qualified benefits property, the second-trust instrument shall not include HOUSE BILL No. 2172—page 11
642-or omit any term that, if included in or omitted from the first-trust
643-instrument, would have increased the minimum distributions required
644-with respect to the qualified benefits property under 26 U.S.C. § 401(a)
645-(9) and any applicable regulations, or any similar requirements that
646-refer to 26 U.S.C. § 401(a)(9) or the regulations. If an attempted
647-exercise of the decanting power violates the preceding sentence, the
648-trustee is deemed to have held the qualified benefits property and any
649-reinvested distributions of the property as a separate share from the date
650-of the exercise of the power and section 22, and amendments thereto,
651-applies to the separate share.
1210+instrument shall not include or omit a term that, if included in or omitted
1211+from the first-trust instrument, would have prevented the transfer to the
1212+first trust from qualifying for a zero inclusion ratio under 26 U.S.C. §
1213+2642(c).
1214+(6) If the first trust is directly or indirectly the beneficiary of qualified
1215+benefits property, the second-trust instrument shall not include or omit any
1216+term that, if included in or omitted from the first-trust instrument, would
1217+have increased the minimum distributions required with respect to the
1218+qualified benefits property under 26 U.S.C. § 401(a)(9) and any applicable
1219+regulations, or any similar requirements that refer to 26 U.S.C. § 401(a)(9)
1220+or the regulations. If an attempted exercise of the decanting power violates
1221+the preceding sentence, the trustee is deemed to have held the qualified
1222+benefits property and any reinvested distributions of the property as a
1223+separate share from the date of the exercise of the power and section 22,
1224+and amendments thereto, applies to the separate share.
6521225 (7) If the first trust qualifies as a grantor trust because of the
653-application of 26 U.S.C. § 672(f)(2)(A), the second trust shall not
654-include or omit a term that, if included in or omitted from the first-trust
655-instrument, would have prevented the first trust from qualifying under
656-26 U.S.C. § 672(f)(2)(A).
657-(8) As used in this paragraph, "tax benefit" means a federal or
658-state tax deduction, exemption, exclusion, or other benefit not
659-otherwise listed in this section, except for a benefit arising from being a
660-grantor trust. Subject to paragraph (9), a second-trust instrument shall
661-not include or omit a term that, if included in or omitted from the first-
662-trust instrument, would have prevented qualification for a tax benefit if
663-the:
664-(A) First-trust instrument expressly indicates an intent to qualify
665-for the benefit or the first-trust instrument clearly is designed to enable
666-the first trust to qualify for the benefit; and
1226+application of 26 U.S.C. § 672(f)(2)(A), the second trust shall not include
1227+or omit a term that, if included in or omitted from the first-trust instrument,
1228+would have prevented the first trust from qualifying under 26 U.S.C. §
1229+672(f)(2)(A).
1230+(8) As used in this paragraph, "tax benefit" means a federal or state
1231+tax deduction, exemption, exclusion, or other benefit not otherwise listed
1232+in this section, except for a benefit arising from being a grantor trust.
1233+Subject to paragraph (9), a second-trust instrument shall not include or
1234+omit a term that, if included in or omitted from the first-trust instrument,
1235+would have prevented qualification for a tax benefit if the:
1236+(A) First-trust instrument expressly indicates an intent to qualify for
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1280+the benefit or the first-trust instrument clearly is designed to enable the
1281+first trust to qualify for the benefit; and
6671282 (B) transfer of property held by the first trust or the first trust
6681283 qualified, or but for provisions of the uniform trust decanting act other
6691284 than this section, would have qualified for the tax benefit.
6701285 (9) Subject to paragraph (4):
671-(A) Except as otherwise provided in paragraph (7), the second
672-trust may be a nongrantor trust, even if the first trust is a grantor trust;
673-and
674-(B) except as otherwise provided in paragraph (10), the second
675-trust may be a grantor trust, even if the first trust is a nongrantor trust.
676-(10) An authorized fiduciary shall not exercise the decanting
677-power if a settlor objects in a signed record delivered to the fiduciary
678-within the notice period and:
679-(A) The first trust and a second trust are both grantor trusts, in
680-whole or in part, the first trust grants the settlor or another person the
681-power to cause the first trust to cease to be a grantor trust, and the
682-second trust does not grant an equivalent power to the settlor or other
683-person; or
684-(B) the first trust is a nongrantor trust and a second trust is a
685-grantor trust, in whole or in part, with respect to the settlor, unless the:
686-(i) Settlor has the power at all times to cause the second trust to
687-cease to be a grantor trust; or
688-(ii) first-trust instrument contains a provision granting the settlor
689-or another person a power that would cause the first trust to cease to be
690-a grantor trust and the second-trust instrument contains the same
691-provision.
692-New Sec. 20. (a) Subject to subsection (b), a second trust may
693-have a duration that is the same as or different from the duration of the
694-first trust.
1286+(A) Except as otherwise provided in paragraph (7), the second trust
1287+may be a nongrantor trust, even if the first trust is a grantor trust; and
1288+(B) except as otherwise provided in paragraph (10), the second trust
1289+may be a grantor trust, even if the first trust is a nongrantor trust.
1290+(10) An authorized fiduciary shall not exercise the decanting power if
1291+a settlor objects in a signed record delivered to the fiduciary within the
1292+notice period and:
1293+(A) The first trust and a second trust are both grantor trusts, in whole
1294+or in part, the first trust grants the settlor or another person the power to
1295+cause the first trust to cease to be a grantor trust, and the second trust does
1296+not grant an equivalent power to the settlor or other person; or
1297+(B) the first trust is a nongrantor trust and a second trust is a grantor
1298+trust, in whole or in part, with respect to the settlor, unless the:
1299+(i) Settlor has the power at all times to cause the second trust to cease
1300+to be a grantor trust; or
1301+(ii) first-trust instrument contains a provision granting the settlor or
1302+another person a power that would cause the first trust to cease to be a
1303+grantor trust and the second-trust instrument contains the same provision.
1304+Sec. 20. (a) Subject to subsection (b), a second trust may have a
1305+duration that is the same as or different from the duration of the first trust.
6951306 (b) To the extent that property of a second trust is attributable to
696-property of the first trust, the property of the second trust is subject to
697-any rules governing maximum perpetuity, accumulation or suspension
698-of the power of alienation that apply to property of the first trust.
699-New Sec. 21. An authorized fiduciary may exercise the decanting
700-power whether or not under the first trust's discretionary distribution
701-standard the fiduciary would have made or could have been compelled
702-to make a discretionary distribution of principal at the time of the
703-exercise.
704-New Sec. 22. (a) If exercise of the decanting power would be
705-effective under the uniform trust decanting act except that the second- HOUSE BILL No. 2172—page 12
706-trust instrument in part does not comply with the act, the exercise of the
707-power is effective and the following rules apply with respect to the
708-principal of the second trust attributable to the exercise of the power:
1307+property of the first trust, the property of the second trust is subject to any
1308+rules governing maximum perpetuity, accumulation or suspension of the
1309+power of alienation that apply to property of the first trust.
1310+Sec. 21. An authorized fiduciary may exercise the decanting power
1311+whether or not under the first trust's discretionary distribution standard the
1312+fiduciary would have made or could have been compelled to make a
1313+discretionary distribution of principal at the time of the exercise.
1314+Sec. 22. (a) If exercise of the decanting power would be effective
1315+under the uniform trust decanting act except that the second-trust
1316+instrument in part does not comply with the act, the exercise of the power
1317+is effective and the following rules apply with respect to the principal of
1318+the second trust attributable to the exercise of the power:
7091319 (1) A provision in the second-trust instrument that is not permitted
7101320 under the act is void to the extent necessary to comply with this act.
7111321 (2) A provision required by the act to be in the second-trust
712-instrument that is not contained in the instrument is deemed to be
713-included in the instrument to the extent necessary to comply with the
714-act.
1322+instrument that is not contained in the instrument is deemed to be included
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1366+in the instrument to the extent necessary to comply with the act.
7151367 (b) If a trustee or other fiduciary of a second trust determines that
7161368 subsection (a) applies to a prior exercise of the decanting power, the
717-fiduciary shall take corrective action consistent with the fiduciary's
718-duties.
719-New Sec. 23. (a) As used in this section:
1369+fiduciary shall take corrective action consistent with the fiduciary's duties.
1370+Sec. 23. (a) As used in this section:
7201371 (1) "Animal trust" means a trust or an interest in a trust created to
7211372 provide for the care of one or more animals.
722-(2) "Protector" means a person appointed in an animal trust to
723-enforce the trust on behalf of the animal or, if no such person is
724-appointed in the trust, a person appointed by the court for that purpose.
725-(b) The decanting power may be exercised over an animal trust
726-that has a protector to the extent the trust could be decanted under the
727-uniform trust decanting act if each animal that benefits from the trust
728-were an individual, if the protector consents in a signed record to the
729-exercise of the power.
1373+(2) "Protector" means a person appointed in an animal trust to enforce
1374+the trust on behalf of the animal or, if no such person is appointed in the
1375+trust, a person appointed by the court for that purpose.
1376+(b) The decanting power may be exercised over an animal trust that
1377+has a protector to the extent the trust could be decanted under the uniform
1378+trust decanting act if each animal that benefits from the trust were an
1379+individual, if the protector consents in a signed record to the exercise of
1380+the power.
7301381 (c) A protector for an animal has the rights under the uniform trust
7311382 decanting act of a qualified beneficiary.
7321383 (d) Notwithstanding any other provision of the uniform trust
7331384 decanting act, if a first trust is an animal trust, in an exercise of the
734-decanting power, the second trust shall provide that trust property may
735-be applied only to its intended purpose for the period the first trust
736-benefited the animal.
737-New Sec. 24. A reference in the Kansas uniform trust code, K.S.A.
738-58a-101 et seq., and amendments thereto, to a trust instrument or terms
739-of the trust includes a second-trust instrument and the terms of the
740-second trust.
741-New Sec. 25. (a) For purposes of law of this state other than the
742-uniform trust decanting act and subject to subsection (b), a settlor of a
743-first trust is deemed to be the settlor of the second trust with respect to
744-the portion of the principal of the first trust subject to the exercise of
745-the decanting power.
1385+decanting power, the second trust shall provide that trust property may be
1386+applied only to its intended purpose for the period the first trust benefited
1387+the animal.
1388+Sec. 24. A reference in the Kansas uniform trust code, K.S.A. 58a-
1389+101 et seq., and amendments thereto, to a trust instrument or terms of the
1390+trust includes a second-trust instrument and the terms of the second trust.
1391+Sec. 25. (a) For purposes of law of this state other than the uniform
1392+trust decanting act and subject to subsection (b), a settlor of a first trust is
1393+deemed to be the settlor of the second trust with respect to the portion of
1394+the principal of the first trust subject to the exercise of the decanting
1395+power.
7461396 (b) In determining settlor intent with respect to a second trust, the
7471397 intent of a settlor of the first trust, a settlor of the second trust and the
7481398 authorized fiduciary may be considered.
749-New Sec. 26. (a) Except as otherwise provided in subsection (c), if
750-exercise of the decanting power was intended to distribute all the
751-principal of the first trust to one or more second trusts, later-discovered
752-property belonging to the first trust and property paid to or acquired by
753-the first trust after the exercise of the power is part of the trust estate of
754-the second trust or trusts.
755-(b) Except as otherwise provided in subsection (c), if exercise of
756-the decanting power was intended to distribute less than all the
757-principal of the first trust to one or more second trusts, later-discovered
758-property belonging to the first trust or property paid to or acquired by
759-the first trust after exercise of the power remains part of the trust estate
760-of the first trust.
1399+Sec. 26. (a) Except as otherwise provided in subsection (c), if
1400+exercise of the decanting power was intended to distribute all the principal
1401+of the first trust to one or more second trusts, later-discovered property
1402+belonging to the first trust and property paid to or acquired by the first
1403+trust after the exercise of the power is part of the trust estate of the second
1404+trust or trusts.
1405+(b) Except as otherwise provided in subsection (c), if exercise of the
1406+decanting power was intended to distribute less than all the principal of the
1407+first trust to one or more second trusts, later-discovered property belonging
1408+to the first trust or property paid to or acquired by the first trust after
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1452+exercise of the power remains part of the trust estate of the first trust.
7611453 (c) An authorized fiduciary may provide in an exercise of the
762-decanting power or by the terms of a second trust for disposition of
763-later-discovered property belonging to the first trust or property paid to
764-or acquired by the first trust after exercise of the power.
765-New Sec. 27. A debt, liability or other obligation enforceable
766-against property of a first trust is enforceable to the same extent against
767-the property when held by the second trust after exercise of the
768-decanting power.
769-New Sec. 28. In applying and construing this uniform act, HOUSE BILL No. 2172—page 13
770-consideration shall be given to the need to promote uniformity of the
771-law with respect to its subject matter among states that enact it.
772-New Sec. 29. The uniform trust decanting act modifies, limits or
773-supersedes the electronic signatures in global and national commerce
774-act, 15 U.S.C. § 7001 et seq., but does not modify, limit or supersede
775-section 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic
776-delivery of any of the notices described in section 103(b) of that act, 15
777-U.S.C. § 7003(b).
778-New Sec. 30. If any provision of the uniform trust decanting act or
779-its application to any person or circumstance is held invalid, the
780-invalidity does not affect other provisions or applications of the act that
781-can be given effect without the invalid provision or application, and to
782-this end the provisions of the act are severable.
783-Sec. 31. K.S.A. 2022 Supp. 58a-411 is hereby amended to read as
784-follows: 58a-411. (a) A noncharitable irrevocable trust may be modified
785-or terminated upon consent of the settlor and all qualified beneficiaries,
786-even if the modification or termination is inconsistent with a material
787-purpose of the trust. A settlor's power to consent to a trust's
788-modification or termination may be exercised by an attorney in fact
789-under a power of attorney only to the extent expressly authorized by the
790-power of attorney or the terms of the trust; by the settlor's conservator
791-with the approval of the court supervising the conservatorship if an
792-agent is not so authorized; or by the settlor's guardian with the approval
793-of the court supervising the guardianship if an agent is not so
794-authorized and a conservator has not been appointed. This subsection
795-does not apply to irrevocable trusts created before, or to revocable
796-trusts that became irrevocable before, January 1, 2003.
797-(b) A noncharitable irrevocable trust may be terminated upon
798-consent of all of the qualified beneficiaries if the court concludes that
799-continuance of the trust is not necessary to achieve any material
800-purpose of the trust. A noncharitable irrevocable trust may be modified
801-upon consent of all of the qualified beneficiaries if the court concludes
802-that modification is not inconsistent with a material purpose of the
803-trust.
804-(c) (1) A spendthrift provision in the terms of the trust is not
805-presumed to constitute a material purpose of the trust.
806-(2) Application of the rule against perpetuities is not presumed to
807-constitute a material purpose of the trust.
808-(d) Upon termination of a trust under subsection (a) or (b), the
809-trustee shall distribute the trust property as agreed by the qualified
810-beneficiaries.
811-(e) If not all of the qualified beneficiaries consent to a proposed
812-modification or termination of the trust under subsection (a) or (b), the
813-modification or termination may be approved by the court if the court is
814-satisfied that:
815-(1) If all of the qualified beneficiaries had consented, the trust
816-could have been modified or terminated under this section; and
817-(2) the interests of a qualified beneficiary who does not consent
818-will be adequately protected.
819-Sec. 32. K.S.A. 59-3404 is hereby amended to read as follows: 59-
820-3404. K.S.A. 59-3401, and amendments thereto, the statutory rule
821-against perpetuities, does not apply to:
822-(1) A nonvested property interest or a power of appointment
823-arising out of a nondonative transfer, except a nonvested property
824-interest or a power of appointment arising out of a:
825-(i) a Premarital or postmarital agreement,;
826-(ii) a separation or divorce settlement,;
827-(iii) a spouse's election,;
828-(iv) a similar arrangement arising out of a prospective, existing or
829-previous marital relationship between the parties,;
830-(v) a contract to make or not to revoke a will or trust,;
831-(vi) a contract to exercise or not to exercise a power of
832-appointment,;
833-(vii) a transfer in satisfaction of a duty of support,; or HOUSE BILL No. 2172—page 14
834-(viii) a reciprocal transfer;
835-(2) a fiduciary's power relating to the administration or
836-management of assets, including the power of a fiduciary to sell, lease
837-or mortgage property, and the power of a fiduciary to determine
838-principal and income;
839-(3) a power to appoint a fiduciary;
840-(4) a discretionary power of a trustee to distribute principal before
841-termination of a trust to a beneficiary having an indefeasibly vested
842-interest in the income and principal;
843-(5) a nonvested property interest held by a charity, government or
844-governmental agency or subdivision, if the nonvested property interest
845-is preceded by an interest held by another charity, government or
846-governmental agency or subdivision;
847-(6) a nonvested property interest in or a power of appointment
848-with respect to a trust or other property arrangement forming part of a
849-pension, profit-sharing, stock bonus, health, disability, death benefit,
850-income deferral or other current or deferred benefit plan for one or
851-more employees, independent contractors or the beneficiaries or
852-spouses, to which contributions are made for the purpose of distributing
853-to or for the benefit of the participants or their beneficiaries or spouses
854-the property, income or principal in the trust or other property
855-arrangement, except a nonvested property interest or a power of
856-appointment that is created by an election of a participant or a
857-beneficiary or spouse; or
858-(7) a property interest, power of appointment or arrangement that
859-was not subject to the common-law rule against perpetuities or is
860-excluded by another statute of this state; or
861-(8) a trust in which the governing instrument states that the rule
862-against perpetuities does not apply to the trust and under which the
863-trustee or other person to whom the power is properly granted or
864-delegated has power under the governing instrument, any applicable
865-statute or the common law to sell, lease or mortgage property for any
866-period of time beyond the period which would otherwise be required
867-for an interest created under the governing instrument to vest. This
868-subsection shall apply to all trusts created by will or inter vivos
869-agreement executed or amended on or after July 1, 2023, and to all
870-trusts created by exercise of power of appointment granted under
871-instruments executed or amended on or after July 1, 2023.
872-Sec. 33. K.S.A. 2022 Supp. 79-32,109 is hereby amended to read
873-as follows: 79-32,109. As used in this act, unless the context otherwise
874-requires:
875-(a) (1) Any term used in this act shall have the same meaning as
876-when used in a comparable context in the federal internal revenue code.
877-Any reference in this act to the "federal internal revenue code" shall
878-mean the provisions of the federal internal revenue code of 1986, and
879-amendments thereto, and other provisions of the laws of the United
880-States relating to federal income taxes, as the same may be or become
881-effective at any time, or from time to time, for the taxable year.
882-(2) Any reference in this act to a federal form or schedule, or to a
883-line number on a federal form or schedule, shall be to such form,
884-schedule and line number as they existed for tax year 2011 and as
885-revised thereafter by the internal revenue service. Any such reference
886-shall include comparable federal forms, schedules, and line numbers
887-used by non-United States residents when filing their federal income
888-tax return with the internal revenue service.
889-(b) "Resident individual" means a natural person who is domiciled
890-in this state. A natural person who spends in the aggregate more than
891-six months of the taxable year within this state shall be presumed to be
892-a resident for purposes of this act in absence of proof to the contrary. A
893-nonresident individual means an individual other than a resident
894-individual.
895-(c) "Resident estate" means the estate of a deceased person whose
896-domicile was in this state at the time of such person's death.
897-"Nonresident estate" means an estate other than a resident estate. HOUSE BILL No. 2172—page 15
898-(d) "Resident trust" means a trust that:
899-(1) Is administered in this state and that;
900-(2) was created by or consists of property owned by a person
901-domiciled in this state on the date the trust or portion of the trust
902-became irrevocable; and
903-(3) has at least one income beneficiary who, on the last day of the
904-taxable year, was a resident of this state.
905-(e) (1) "Resident partner" means a partner who is a resident
906-individual, a resident estate, or a resident trust.
907-(2) "Nonresident partner" means a partner other than a resident
908-partner.
909-(f) (1) "Resident beneficiary" means a beneficiary of an estate or
910-trust which beneficiary is a resident individual, a resident estate, or a
911-resident trust.
912-(2) "Nonresident beneficiary" means a beneficiary other than a
913-resident beneficiary.
914-(g) "Director" means the director of taxation.
915-(h) (1) "Modified Kansas source income" means that part of a
916-nonresident individual's Kansas adjusted gross income as set forth in
917-K.S.A. 79-32,117, and amendments thereto, derived from sources in
918-Kansas. Items of income including unemployment compensation, gain,
919-loss or deduction reflected in Kansas adjusted gross income shall be
920-considered derived from sources in Kansas to the extent that they are
921-attributable to:
922-(A) The ownership of any interest in real or tangible personal
923-property in this state;
924-(B) a business, trade, profession or occupation carried on in this
925-state;
926-(C) a business, trade, profession or occupation carried on partly
927-within and partly without this state as determined by the uniform
928-division of income for tax purposes act as set forth in K.S.A. 79-3271
929-through 79-3293, and amendments thereto;
930-(D) the distributive share of partnership income, gain, loss and
931-deduction determined under this section as if the partnership were a
932-nonresident individual;
933-(E) the share of estate or trust income, gain, loss and deduction
934-determined under K.S.A. 79-32,137, and amendments thereto;
935-(F) prizes won from lottery games conducted by the Kansas
936-lottery;
937-(G) any winnings from parimutuel wagering derived from the
938-conduct of parimutuel activities within this state; or
939-(H) income from intangible personal property, including annuities,
940-dividends, interest, and gains from the disposition of intangible
941-personal property to the extent that such income is from property
942-employed in a trade, business, profession or occupation carried on in
943-Kansas. A nonresident, other than a dealer holding property primarily
944-for sale to customers in the ordinary course of such dealer's trade or
945-business, shall not be deemed to carry on a business, trade, profession
946-or occupation in Kansas solely by reason of the purchase and sale of
947-property for such nonresident's own account.
948-(2) "Modified Kansas source income" does not include:
949-(A) Compensation paid by the United States for service in the
950-armed forces of the United States, performed during an induction
951-period by an individual not domiciled in this state; or
952-(B) such individual's share of distributed or undistributed taxable
953-income or net operating loss of a corporation which is an electing small
954-business corporation unless an agreement is filed as provided in K.S.A.
955-79-32,139, and amendments thereto, in which event, the "modified
956-Kansas source income" of such nonresident individual shall include
957-such individual's share of such corporation's distributed and
958-undistributed taxable income or net operating loss as such share is
959-determined under the internal revenue code only to the extent, however,
960-that such income, gain or loss is at the corporate level, derived from
961-sources within Kansas. HOUSE BILL No. 2172—page 16
962-Sec. 34. K.S.A. 59-3404 and K.S.A. 2022 Supp. 58a-411 and 79-
963-32,109 are hereby repealed.
964-Sec. 35. This act shall take effect and be in force from and after its
1454+decanting power or by the terms of a second trust for disposition of later-
1455+discovered property belonging to the first trust or property paid to or
1456+acquired by the first trust after exercise of the power.
1457+Sec. 27. A debt, liability or other obligation enforceable against
1458+property of a first trust is enforceable to the same extent against the
1459+property when held by the second trust after exercise of the decanting
1460+power.
1461+Sec. 28. In applying and construing this uniform act, consideration
1462+shall be given to the need to promote uniformity of the law with respect to
1463+its subject matter among states that enact it.
1464+Sec. 29. The uniform trust decanting act modifies, limits or
1465+supersedes the electronic signatures in global and national commerce act,
1466+15 U.S.C. § 7001 et seq., but does not modify, limit or supersede section
1467+101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of
1468+any of the notices described in section 103(b) of that act, 15 U.S.C. §
1469+7003(b).
1470+Sec. 30. If any provision of the uniform trust decanting act or its
1471+application to any person or circumstance is held invalid, the invalidity
1472+does not affect other provisions or applications of the act that can be given
1473+effect without the invalid provision or application, and to this end the
1474+provisions of the act are severable.
1475+Sec. 31. This act shall take effect and be in force from and after its
9651476 publication in the statute book.
966-I hereby certify that the above BILL originated in the House,
967-and passed that body
968-HOUSE concurred in
969-SENATE amendments __________________________________________________________________
970-
971-
972-Speaker of the House.
973-
974-Chief Clerk of the House.
975-
976-Passed the SENATE
977- as amended
978-
979-President of the Senate.
980-
981-
982-Secretary of the Senate.
983-APPROVED ______________________________________________________________________________
984-
985-Governor.
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